Oil Price Volatility Weighs on Stocks as Iran Conflict Continues

U.S. stocks dipped slightly on Tuesday, pulling back from their all-time high set just a day earlier. The S&P 500 fell by 0.3%, while the Dow Jones Industrial Average dropped 184 points, or 0.3%. Meanwhile, oil prices continued to swing wildly due to uncertainty over when crude will flow freely again following the recent conflict with Iran.

The price for a barrel of Brent crude briefly rose above $90 in the morning but fell back below $87 before settling at $88.91, up 1.4% from Monday. This volatility has become typical since the U.S. and Israel's attack on Iran in late February led to the closure of the Strait of Hormuz.

Higher oil prices have sent inflation soaring, with the average cost for a gallon of regular gasoline reaching $4.01, according to AAA. Economists expect the latest monthly reading on inflation to show it remains high but has decelerated to 3.4% in July from 3.5% in June.